Real Estate

Just closed on a pre-construction condo, and my fees were...

  • Last Updated:
  • Aug 25th, 2021 4:15 pm
[OP]
Sr. Member
Feb 14, 2005
712 posts
442 upvotes
Toronto

Just closed on a pre-construction condo, and my fees were...

Purchase Price: 639,900.
Total additional money paid to take title of the property: 39,519, or approximately 6.2% of the purchase price. This includes legal charges for interim closing paperwork, and a bit over one month of interim occupancy charges. Not included is the $24k in HST that I need to get back from the government, so to close on this condo, I needed access to $64k of cash or LOC.

I've seen many website estimate 2-4% of the purchase price to fulfill the closing costs. Watch out cause that benchmark is outdated and no longer valid, or they're being conservative on some of the bigger line items like LTT (double if in Toronto) or interim occupancy fees.

Specifically my legal fees were also high at $4300, but taking away the APS amendment and the corporation related fees, it's around $2,500 including title searches, insurance, etc. Not the cheapest lawyers I used but seems to be around the right benchmark. Sometimes you get what you pay for...

Full breakdown here:
Capture.JPG


Edited for semantics as discussed in the thread.
Last edited by raxen on Aug 5th, 2021 9:44 pm, edited 4 times in total.
58 replies
Newbie
Jul 24, 2010
69 posts
64 upvotes
Toronto
Hi Raken,
Based on the spreadsheet you provided it looks reasonable.
Following items should not be a surprise
  1. $17000 on land transfer tax ( I am assuming you are in Toronto as it is double the usual amount, )
    $11000 in development charges, there are always provided in builder's sales agreement
    $5500 in interim occupancy , as a Condo buyers you should be expecting it
These add up to $33,500 of the $39,500 total you listed.

Thanks
[OP]
Sr. Member
Feb 14, 2005
712 posts
442 upvotes
Toronto
You're correct. Most of the fees aren't a surprise at all, especially if one looks at the breakdown in the APS closely. The purpose of the post was just to publicly discuss what to expect overall in the closing process, as there's always a thread from time to time about "What are the lawyer fees for closing" or "How much should I budget to close my condo"

LTT was double as the property is in Toronto.
Development charges were capped at $9500 + HST as per the APS when I signed it. I'm surprised there were no park levies.
Interim occupancy was actually just ~$2700, which represents about 1.5 months of interim occupancy. The developer closed the building pretty quickly, and to be honest, perfect timing for the September rush.

So the big 3 things about were $31k. Rest are the legal fees and things like Tarion Registration, Builder Admin, or even the property tax for the rest of 2021 that add up.




watul wrote: Hi Raken,
Based on the spreadsheet you provided it looks reasonable.
Following items should not be a surprise
  1. $17000 on land transfer tax ( I am assuming you are in Toronto as it is double the usual amount, )
    $11000 in development charges, there are always provided in builder's sales agreement
    $5500 in interim occupancy , as a Condo buyers you should be expecting it
These add up to $33,500 of the $39,500 total you listed.

Thanks
Deal Expert
Feb 29, 2008
15141 posts
11613 upvotes
Tarrana
I’ve been preaching for ages. Toronto condo closing costs are obscene.

And you capped
Deal Addict
User avatar
Jan 14, 2009
2736 posts
1657 upvotes
Vancouver, BC
JayLove06 wrote: I’ve been preaching for ages. Toronto condo closing costs are obscene.

And you capped
No kidding.

When we bought our presale in 2015 in BC it was only 2 lines.

BC Transfer Tax $15,367
Legal Costs (incl GST) $840

I know the other costs were baked into the purchase price but it made comparing presale properties across municipalities a lot easier.
Deal Addict
Jan 9, 2010
2341 posts
1814 upvotes
I closed on a condo earlier this year and my costs were 6.2% as well coincidentally without counting the "soft" costs which is the interest on the HELOC throughout the construction period. I would say that a comfortable 5-8% is probably within reason.
Deal Addict
Jul 30, 2015
2964 posts
1973 upvotes
Toronto, ON
JayLove06 wrote: I’ve been preaching for ages. Toronto condo closing costs are obscene.

And you capped
People say property taxes in Toronto are low. This is how they make up for it. Toronto muni bill is also higher than other regions afaik.
Deal Expert
Feb 29, 2008
15141 posts
11613 upvotes
Tarrana
canoek wrote: People say property taxes in Toronto are low. This is how they make up for it. Toronto muni bill is also higher than other regions afaik.
I'd rather have higher property taxes.
Deal Addict
Jul 30, 2015
2964 posts
1973 upvotes
Toronto, ON
JayLove06 wrote: I'd rather have higher property taxes.
I would rather have a government that can control its expenses. Second best option is higher property taxes not wrong there.
Deal Fanatic
User avatar
Dec 3, 2004
5749 posts
5322 upvotes
Edmonton
Sure is nice to have no Land transfer tax in Alberta. What a rip off.
Deal Expert
Feb 29, 2008
15141 posts
11613 upvotes
Tarrana
adamtheman wrote: Sure is nice to have no Land transfer tax in Alberta. What a rip off.
Toronto - TWO land transfer taxes.
Deal Fanatic
User avatar
Dec 3, 2004
5749 posts
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Edmonton
JayLove06 wrote: Toronto - TWO land transfer taxes.
The city must be flush with cash thanks to this record boom of sales. I am sure they will use all that money wisely and won't blow it........
Deal Expert
Feb 29, 2008
15141 posts
11613 upvotes
Tarrana
adamtheman wrote: The city must be flush with cash thanks to this record boom of sales. I am sure they will use all that money wisely and won't blow it........
Money goes right into a fire pit.
Deal Fanatic
User avatar
Dec 3, 2004
5749 posts
5322 upvotes
Edmonton
JayLove06 wrote: Money goes right into a fire pit.
Except fire pits aren't allowed in Toronto. Can't even have a little log fire in your own backyard. The land transfer tax probably goes towards enforcing that law. Make sure there's lots of bylaw officers running around incase anyone decides to have a backyard fire pit.
Deal Addict
Mar 2, 2017
2186 posts
3880 upvotes
Toronto/Markham
raxen wrote: Purchase Price: 639,900.
Total closing costs: 39,519, or approximately 6.2% of the purchase price. This includes legal charges for interim closing paperwork, and a bit over one month of interim occupancy charges. Not included is the $24k in HST that I need to get back from the government, so to close on this condo, I needed access to $64k of cash or LOC.

I've seen many website estimate 2-4% of the purchase price to fulfill the closing costs. Watch out cause that benchmark is outdated and no longer valid, or they're being conservative on some of the bigger line items like LTT (double if in Toronto) or interim occupancy fees.

Specifically my legal fees were also high at $4300, but taking away the APS amendment and the corporation related fees, it's around $2,500 including title searches, insurance, etc. Not the cheapest lawyers I used but seems to be around the right benchmark. Sometimes you get what you pay for...

Full breakdown here:
Capture.JPG

Thanks for sharing, solid post.
Realtor, Investor, CPA - Collaborate with like minded people
Deal Addict
Jul 30, 2015
2964 posts
1973 upvotes
Toronto, ON
adamtheman wrote: The city must be flush with cash thanks to this record boom of sales. I am sure they will use all that money wisely and won't blow it........
If you give 2 billion to Toronto tomorrow it will still be begging. Biggest money pit of a mismamanged city.
Member
User avatar
Dec 14, 2006
204 posts
127 upvotes
Toronto
I got billed a section 37 charge (~$4700) and a hydro connection charge (~$2600) for my 2bd 870sqft condo.
Given that - yours seems quite reasonable.
Life is Hard. It's harder when you're stupid.
[OP]
Sr. Member
Feb 14, 2005
712 posts
442 upvotes
Toronto
What's a Section 37 charge? In my APS, Section 37 was Electronic Registration, which was $250 + taxes.

Hydro connection charge is one I expect to be coming. I haven't received my first bill yet from the utility company, but they have my PAD details so we'll see.

kitsunedon wrote: I got billed a section 37 charge (~$4700) and a hydro connection charge (~$2600) for my 2bd 870sqft condo.
Given that - yours seems quite reasonable.
Deal Addict
Jan 15, 2010
1256 posts
1479 upvotes
Toronto
City always gotta get their development fees in addition to the multitude of taxes. All of it drives up housing prices while only a fraction of it gets spent on housing infrastructure.

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